Economic Policy Reform and Competitiveness Project (EPRC)

Chemonics
www.eprc–chemonics.biz

Economic Policy Support

Memorandum of Understanding (MoU) with the General Agency for Specialized Inspection: To help the agency prepare for the implementation of the Single Electronic Window for Foreign Trade Facilitation (SEW) and provide improved public access to agency policies and procedures, the project and the General Agency for Specialized Inspection (GASI)—formerly the State Specialized Inspection Agency—signed an MoU on 20 February. The objectives of the MoU are to:

• Improve the information systems, establish a local IT network and strengthen network security of the GASI Zamyn-Uud office to allow it to connect to Customs office networks which will serve as a pilot project for the connection of other GASI offices to the Customs networks in various locations.
• Improve the dissemination of public information through a redesigned GASI website.
• Improve the information systems and network security of the GASI Ulaanbaatar office to maintain the reliability and integrity of the website offering public information.

Market analysis of cement, glass-making, and iron bar manufacturing: The project finished data collection and cleaning, and is now working with the National Center for Construction, Urban Development and Public Utilities to analyze the data and implement the “Master Plan on Construction Material Production Development 2007-2015.” Preliminary analysis will be submitted to the working group in early March 2009.

Legal and regulatory framework for Public-Private Partnerships (PPPs) and Concessions:  EPRC has received a letter from the Ad Hoc Parliamentary Committee on PPPs and is currently discussing the terms of technical assistance to be provided.

MoU signed among freight forwarders to create a Public-Private Partnership company with the GoM to develop a logistics park in Zamyn Uud: After weeks of negotiations and project assistance, ten freight forwarding companies signed an MoU on 22 January 2009 agreeing to establish the Logistics Park Corporation (LPC) as a Public Private Partnership (PPP) with the GoM. Signatories of the MoU included Tuushin LLC, SB Logistics LLC, Mongol-Express LLC, TransGate LLC, BLC LLC, Aziin Zam LLC, Global Logistics LLC, LandEx LLC, Erin International LLC, and Material ImpEx LLC. The MoU begins to operationalize the Prime Minister’s Resolution of 23 October 2008 when the Association of Freight Forwarders and freight forwarders (FFs) made presentations to the Prime Minister’s Consultative Council on Investment Climate and Private Sector Development on the pressing need to improve the road to rail transfer facilities at Zamyn Uud. Project efforts will now focus on working with the GoM to sign a separate MoU with the freight forwarders to form the joint company and assign the land use rights to it as the GoM shareholding contribution.

Financial Markets Support

IPO regulations:  On 19 February, the Financial Regulatory Commission (FRC) approved the Regulations for Initial Public Offerings (IPOs) developed with project assistance. During June and July 2008, project technical expert Cliff Kennedy reviewed the laws, regulations, policies and procedures governing the approval of IPOs of securities in Mongolia and developed recommendations for improving the legal and regulatory environment, procedural changes, and capacity at the FRC. The FRC and the project organized a public presentation of findings and recommendations for the Mongolian investment industry on 1 July 2008. The approved IPO regulations largely incorporate Cliff Kennedy’s recommendations for improving the policies and procedures for approval, listing and supervision of  IPOs of securities in Mongolia. The technical report is available at www.eprc-chemonics.biz.  

Corporate governance:  EPRC developed a twelve-module corporate directors training course to promote a better understanding and build awareness of good corporate governance practices in Mongolia. In cooperation with the Institute of Finance and Economics (IFE) and the FRC, the project aims to build institutional capacity to create sustainable training and educational programs in management and corporate governance. In early February, short-term project expert Demir Yener delivered a case-writing skills development workshop as a kick off to the “train the trainers” program held from 21-24 February. The training program aims to help enhance the skill level of Mongolian business leaders in corporate governance and to improve transparency, responsibility and accountability, as well as fair treatment of all shareholders.

Energy Sector Support 

Energy sector financial status:  The project continues to assist the ERA in implementing the remaining tasks in the approved Tariff Reform Plan in accordance with the plan schedule. The ERA has received requests for electricity and heat tariff increases from most of the energy enterprises and other interested parties. The ERA prepared a proposal to increase tariffs, including the amounts and timing thereof.

Competitive electricity market design and implementation:  The project completed and distributed a revised draft of the market rules which were discussed with the ERA and the Market Working Group on 19 February. Project continues to seek Working Group (WG) approval of the rules and continues to work on a revised Grid Code.

Update of ERA Assessment:  The update of the November 2006 assessment has been completed and will be delivered to USAID, counterparts and the Energy Working Group (EWG) hopefully by the end of February or early March.

EWG and GoM/external partners meetings:  As a result of the ongoing organization of the MMRE’s Energy Component, the EWG meeting scheduled for 19 February was postponed to 19 March. The MoF and line Ministries continue to define the priority actions for all line ministries, in matrix form, for the next one to two years. At the request of the GoM, the brief GoM/External Partners Technical Session scheduled for 11 February to discuss the matrices was also postponed indefinitely.

Consensus Building, Public Education, and National Dialogue Support

National dialogue and consensus building on mining policy and issues:  The project continues to assist civil society organizations and MMRE in developing proper communications strategies for a productive dialogue on mining policy issues. A short-term international mining expert facilitated various training sessions with members of civil society on the mining life cycle in addition to providing global case study examples of civil society effectively engaging with government on various mining issues. An international communications strategy expert prepared a draft communications strategy for the MMRE to serve as a framework for providing information on various aspects of the OT mine negotiations.

Collaboration with the Cabinet Secretariat:  EPRC met with the Cabinet Secretariat on 13 February to discuss the continuation of project support for the promotion and management of the Open Government website in addition to providing technical assistance to the Cabinet Secretariat’s information technology department. At the request of the Cabinet Secretariat, the project is drafting an MoU to outline anticipated project assistance.